Owlet, Inc. (NYSE:OWLT) shareholders are probably feeling a little disappointed, since its shares fell 9.6% to US$5.15 in the week after its latest yearly results. It was a pretty bad result overall; while revenues were in line with expectations at US$54m, statutory losses exploded to US$4.53 per share. Following the result, the analyst has updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analyst latest (statutory) post-earnings forecasts for next year.
After the latest results, the one analyst covering Owlet are now predicting revenues of US$74.6m in 2024. If met, this would reflect a major 38% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 81% to US$0.84. Before this earnings announcement, the analyst had been modelling revenues of US$69.3m and losses of US$0.91 per share in 2024. So there seems to have been a moderate uplift in analyst sentiment with the latest consensus release, given the upgrades to both revenue and loss per share forecasts for this year.
The consensus price target fell 44%, to US$15.00, suggesting that the analyst remain pessimistic on the company, despite the improved earnings and revenue outlook.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Owlet's past performance and to peers in the same industry. One thing stands out from these estimates, which is that Owlet is forecast to grow faster in the future than it has in the past, with revenues expected to display 38% annualised growth until the end of 2024. If achieved, this would be a much better result than the 20% annual decline over the past three years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 7.8% annually. Not only are Owlet's revenues expected to improve, it seems that the analyst is also expecting it to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion is that the analyst made no changes to their forecasts for a loss next year. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of Owlet's future valuation.
With that in mind, we wouldn't be too quick to come to a conclusion on Owlet. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Owlet going out as far as 2026, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 5 warning signs with Owlet (at least 1 which can't be ignored) , and understanding these should be part of your investment process.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.